The deficit on Uganda’s current account improved by $177 million (about Shs437.190 billion) in the fourth quarter of 2013, implying the country’s expenditure on imports reduced.

The Bank of Uganda state of economy report for February indicates Uganda’s current account deficit improved to $417.2 million (about Shs1.030 trillion) during the quarter ended December 2013 from a $594.2 million (about Shs1.467 trillion) deficit in the previous three months period (quarter).

However, Uganda still has more work to do in order to further reduce the negative effects of a heavy current account deficit on its economic growth. “The improvement in current account deficit was driven mainly by: higher receipts of current transfers due to peak season receipts of workers’ remittances in December and higher project aid inflows to government and lower deficits posted in the goods, services and income accounts,” the Central Bank report read.

The trade deficit improved by 2.6 per cent to $568.6 million (about Shs1.404 trillion) in the quarter four of 2013 on account of lower import expenditure. The report shows that during the quarter under review, Uganda’s import bill declined by 2.9 per cent on quarter to quarter basis $1.235.0 billion (about Shs3.050 trillion).

The state of economy report by the Central Bank reveals export earnings declined by 3.1 per cent on quarter to quarter basis to $666.5 million (about Shs1.646 trillion). According to the report, COMESA region accounted for 62.3 per cent of Uganda’s export destination while EU accounted for 17.3 per cent.

These regions were the main destinations of Uganda’s exports during quarter four of 2013. South Sudan, which used to be the largest importer of Uganda’s goods, did not feature in the main destination of the exports from Uganda.

The central bank says the impact of the war in South Sudan was muted in the quarter, since the war started in mid-December.